nep-ene New Economics Papers
on Energy Economics
Issue of 2014‒05‒04
forty-five papers chosen by
Roger Fouquet
London School of Economics

  1. Impact of Energy Consumption and Environmental Degradation on Economic Growth in Nigeria By Yusuf, Sulaimon Aremu
  2. Greenhouse Gas Emissions in New Zealand: A Preliminary Consumption-Based Analysis By Carl Romanos; Suzi Kerr; Campbell Will
  3. L’interaction entre les énergies nucléaire et renouvelables et ses effets systémiques dans les réseaux électriques bas carbone By Cometto, Marco; Keppler, Jan Horst
  4. A Review of Renewable Energy Supply and Energy Efficiency Technologies By Abolhosseini, Shahrouz; Heshmati, Almas; Altmann, Jörn
  5. Climate change and balance of trade By Hochman, Gal; Zilberman, David
  6. Integrating Thermal and Hydro Electricity Markets: Economic and Environmental Costs of not Harmonizing Pricing Rules By Billette de Villemeur, Etienne; Pineau, Pierre-Olivier
  7. Coal Consumption, Industrial Production and CO2 Emissions in China and India By Sahbi Farhani; Muhammad Shahbaz; Ilhan Ozturk
  8. Energy transition toward renewables and metal depletion: an approach through the EROI concept By Florian Fizaine; Victor Court
  9. Second Annual Asia-Pacific Dialogue on Clean Energy Governance, Policy, and Regulation: Energy Efficiency Workshop By Asian Development Bank (ADB); ; ;
  10. How to correct long-term system externality of large scale windpower development by a capacity mechanism? By Finon, Dominique; Cepeda, Mauricio
  11. Employment Effects of Renewable Energy Supply - A Meta Analysis By Ina Meyer; Mark Wolfgang Sommer
  12. Natural gas consumption and economic growth in France: Evidence for the role of exports, capital and labor By Sahbi Farhani; Muhammad Shahbaz; Mohammad Mafizur Rahman
  13. Freight transport, policy instruments and climate By Mandell, Svante; Nilsson, Jan-Eric; Vierth, Inge
  14. Can we reconcile different capacity adequacy policies with an integrated electricity market? By Finon, Dominique
  15. European energy industry shocks, corporate control and firms' value By John J. García; Francesc Trillas
  16. Motor fuel prices in Turkey By Erdogdu, Erkan
  17. Towards a clean vehicle fleet: from households’ valuation of fuel efficiency to policy implications By Bénédicte Meurisse; Maxime Le Roy
  18. Policy Uncertainty in China, Oil Shocks and Stock Returns By Wensheng Kang; Ronald A. Ratti
  19. The Impact of Oil Price Shocks on U.S. Bond Market Returns By Wensheng Kang; Ronald A. Ratti; Kyung Hwan Yoon
  20. The Electricity Consumption in a Rentier State: Do Institutions Matter? By Bouoiyour, Jamal; Selmi, Refk; Shahbaz, Muhammad
  21. The "Second Dividend" and the Demographic Structure By Jouvet, Pierre-André; Gonand, Frédéric
  22. Modelling Return and Volatility of Oil Price using Dual Long Memory Models By Heni BOUBAKER; Nadia SGHAIER
  23. Climate Impacts in Europe. The JRC PESETA II Project By CISCAR MARTINEZ Juan Carlos; FEYEN Luc; SORIA RAMIREZ Antonio; LAVALLE Carlo; PERRY Miles; RAES Frank; NEMRY Francoise; DEMIREL Hande; RÓZSAI Máté; DOSIO Alessandro; DONATELLI Marcello; SRIVASTAVA Amit Kumar; FUMAGALLI Davide; NIEMEYER Stefan; SHRESTHA Shailesh; CIAIAN Pavel; HIMICS Mihaly; VAN DOORSLAER Benjamin; BARRIOS Salvador; IBANEZ RIVAS Juan Nicolás; FORZIERI Giovanni; ROJAS MUJICA Rodrigo Felipe; BIANCHI Alessandra; DOWLING Paul; CAMIA Andrea; LIBERTA Giorgio; SAN-MIGUEL-AYANZ Jesus; DE RIGO Daniele; CAUDULLO Giovanni; BARREDO CANO Jose Ignacio; PACI Daniele; PYCROFT Jonathan; SAVEYN Bert; REVESZ Tamas; BARANZELLI Claudia; VANDECASTEELE Ine; BATISTA E SILVA Filipe; IBARRETA RUIZ Dolores
  24. Environmental Sustainability with a Pollution Tax By López, Ramón E.; Yoon, Sang W.
  25. Do Artistic Images Affect the Willingness to Buy Carbon Offsets? An Empirical Study By Turner, Robert
  26. Development of a participatory action research approach for four agricultural carbon projects in east Africa: By Shames, Seth; Bernier, Quinn; Masiga, Moses
  27. Le rôle croissant de la main visible dans les marchés électriques européens : l’effet des politiques de décarbonation sur le régime de marché By Finon, Dominique
  28. Analyzing and visualizing the synergistic impact mechanisms of climate change related costs By Halkos, George; Tsilika, Kyriaki
  29. Do Chinese individuals believe in global climate change and why? An econometric analysis By Jing Dai; Andreas Ziegler; Martin Kesternich; Andreas Löschel
  30. Estimation de l’élasticité prix de la demande électrique en France By Bourbonnais, Régis; Keppler, Jan Horst
  31. The cost of adapting to climate change in Ethiopia: Sector-wise and macro-economic estimates: By Robinson, Sherman; Strzepek, Kenneth M.; Cervigni, Raffaello
  32. On the relationship between the prices of oil and the precious metals: Revisiting with a multivariate regime-switching decision tree By Philippe Charlot; Vêlayoudom Marimoutou
  33. Climate Change and Natural Disasters: Responding to the Philippines’ Haiyan tragedy By K. C. Ratha; S. K. Mahapatra
  34. Governing Knowledge for Development: Knowledge Clusters in Brunei Darussalam and Malaysia By Ariff, Syamimi; Hans-Dieter, Evers; Anthony Banyouko, Ngah; Farah, Purwaningrum
  35. Pollution-Income Dynamics By López, Ramón E.; Yoon, Sang W.
  36. Maize Price Differences and Evidence of Spatial Integration in Malawi: The case of selected markets: By Nyongo, Lovemore
  37. Unionised labour market, environment and endogenous growth By Bhattacharyya, Chandril; Gupta, Manash Ranjan
  38. Reflections on Climate Policy:Science, Economics, and Extremes By Fisher, Anthony C; Le, Phu V
  39. Canadian Non-Energy Exports: Past Performance and Future Prospects By André Binette; Daniel de Munnik; Émilien Gouin-Bonenfant
  40. Overvaluation of the real exchange rate and the Dutch Disease: the Colombian case By Thomas Goda; Alejandro Torres
  41. Decentralized Regulation, Environmental Efficiency and Productivity By Ghosal, Vivek; Stephan, Andreas; Weiss, Jan
  42. Directional Volatility Spillovers between Agricultural, Crude Oil, Real Estate and other Financial Markets By Grosche, Stephanie; Heckelei, Thomas
  43. Does Electrification Spur the Fertility Transition? Evidence from Indonesia By Grimm, Michael; Sparrow, Robert; Tasciotti, Luca
  44. Response to a social dilemma : an analysis of the choice between an economic and an environmental optimum in a policy making context By Nerhagen, Lena; Pyddoke , Roger; Jussila Hammes, Johanna
  45. Can Information Reduce Nonpayment for Public Utilities? Experimental Evidence from South Africa By Andrea Szabo; Gergely Ujhelyi

  1. By: Yusuf, Sulaimon Aremu
    Abstract: The argument concerning the contribution of energy towards the growth objective and the adverse environmental impact its consumption brings along are contentious, whether to reduce energy consumption in order to reduce negative externality as it is just an intermediate input which its contribution is insignificant to the accomplishment of growth objective is the curiosity behind this study. The study empirically examined the impact of energy consumption and carbon emission on economic growth in Nigeria between 1981 and 2011. The research takes analytical/quantitative dimension. It is a multivariate study by including in the model two conventional determinants of Economic Growth, Capital proxy by Gross Capital Formation, labour proxy by labour participation rate, and other variables of study which are electricity consumption, energy use kt in oil equivalent and Co2 emission. Restricted Error Correction Model (VAR) is used, Impulse Response function was carried out and the necessary diagnostic tests were examined with the aid of Econometrics View Package (E- view). The study reveals that the long run relationship exists among the variables and electricity contributes significantly to the economic growth. Further investigation using Granger causality analysis to examine the causal directions among the variables reveals bidirectional causality between electricity consumption and economic growth and indicates unidirectional causality running from energy use kt of oil to carbon emission. This brings the study to conclusion that electricity is not just an intermediate input; its contribution to the accomplishment of growth objective cannot be relegated to the background. Hence, Nigeria can pursue triple goals of energy security by exploiting renewable energy source, environmental sustainability and sustainable inclusive growth. Therefore necessary recommendations were made.
    Keywords: Energy Consumption, Carbon Emission, Economic Growth
    JEL: Q43
    Date: 2014–01–06
  2. By: Carl Romanos (Stanford University); Suzi Kerr (Motu Economic and Public Policy Research); Campbell Will (University of Otago)
    Abstract: New Zealand’s per capita greenhouse gas emissions are usually calculated by taking total emissions as reported under the Kyoto Protocol or the United Nations Framework Convention on Climate Change and simply dividing by population. However this focuses on emissions associated with production within New Zealand. From the point of view of individuals, these are not the emissions they control, and hence can mitigate. Individuals can calculate their “carbon footprint” but tools to do this typically focus on a few categories of emissions (mostly electricity, direct fuel use and waste) and emissions footprints are not available for a wide range of households so cannot be used for comparative analysis. This paper explores how the carbon emissions related to the consumption categories of households in New Zealand vary with household characteristics. We use product consumption data from the 2007 Household Economic Survey. Consumption within each category is linked to a carbon intensity multiplier (tonnes of carbon dioxide equivalent per dollar of consumption) which is derived from: the official 2007 input–output table of 106 industries produced by Statistics New Zealand; energy data on carbon dioxide per petajoule of fuel in each industry from the Energy Data File; and the Energy Greenhouse Gas Emissions Report both provided by the Ministry of Business, Innovation and Employment. Previous literature has used similar methods to calculate the incidence of a carbon tax (e.g. Creedy and Sleeman [2006]). This paper uses these methods in order to study which sectors of household expenditure offer the greatest opportunities for mitigation and how these opportunities vary with household characteristics such as income decile, region and household composition.
    Keywords: Climate change, emissions, consumption, household emissions
    JEL: D12 D62 Q41 Q01 Q54
    Date: 2014–04
  3. By: Cometto, Marco; Keppler, Jan Horst
    Abstract: This presentation of the findings of Nuclear energy and renewables : System effects in low-carbon electricity systems (recently published by OECD’s Nuclear Energy Agency) analyzes the interactions between “variable renewables and dispatchable energy technologies” (mainly wind and solar power). It describes the major effects of these interactions on the electricity grid and systematically estimates the associated costs for six OECD countries.
    Keywords: Réseaux électriques (énergie); Développement durable; Transition énergétique; Énergies renouvelables;
    JEL: Q56 Q42
    Date: 2013
  4. By: Abolhosseini, Shahrouz (Seoul National University); Heshmati, Almas (Jönköping University, Sogang University); Altmann, Jörn (Seoul National University)
    Abstract: Electricity consumption will comprise an increasing share of global energy demand during the next two decades. In recent years, the increasing prices of fossil fuels and concerns about the environmental consequences of greenhouse gas emissions have renewed the interest in the development of alternative energy resources. In particular, the Fukushima Daiichi accident was a turning point in the call for alternative energy sources. Renewable energy is now considered a more desirable source of fuel than nuclear power due to the absence of risk and disasters. Considering that the major component of greenhouse gases is carbon dioxide, there is a global concern about reducing carbon emissions. In this regard, different policies could be applied to reducing carbon emissions, such as enhancing renewable energy deployment and encouraging technological innovations. Two main solutions may be implemented to reduce CO2 emissions and overcome the problem of climate change: replacing fossil fuels with renewable energy sources as much as possible and enhancing energy efficiency. In this paper, we discuss alternative technologies for enhancing renewable energy deployment and energy use efficiency.
    Keywords: energy resources, renewable energy, energy use efficiency, generation technology, carbon emission, green employment
    JEL: D61 D62 H23 N50 O13 Q52 Q55
    Date: 2014–04
  5. By: Hochman, Gal; Zilberman, David
    Abstract: In the absence of a global climate agreement, countries employ local policies to curb pollution and introduce clean energy. These policies limit domestic consumption of a traded energy source but increase exports thus improving a country’s energy balance and its balance of trade. While focusing on US energy policy, we show this phenomenon for both petroleum products and for coal.
    Keywords: Social and Behavioral Sciences, energy sources, international trade, technological change, climate change, balance of trade, green paradox
    Date: 2014–03–01
  6. By: Billette de Villemeur, Etienne; Pineau, Pierre-Olivier
    Abstract: The electricity sector is the largest source of GHG emissions in the world, and reducing these emissions would often be costly. However, because electricity markets remain often only integrated at a shallow level (with different pricing regulations), many gains from deeper integration (adoption of marginal cost pricing everywhere) are yet to capture. This paper assesses the benefits of such deep integration between a "hydro" jurisdiction and a "thermal" one. It also underscores the inefficiency of trade when pricing rules differ. Our detailed hourly model, calibrated with real data (from the provinces of Ontario and Quebec, Canada), estimates price, consumption, emissions and welfare changes associated to fully integrating electricity markets, under transmission constraints. A negative abatement cost of $37/tonne of CO2 is found (for more than 1 million tonnes), cleary illustrating the untapped potential of wealth creation in carbon reduction initiatives. Furthermore, given the inefficiency of shallow integration between markets, we find that removing interconnections between markets is a relatively affordable CO2-reduction opportunity, at $21.5/tonne.
    Keywords: Market Integration; Regulation; Electricity Trade; Environmental Impacts.
    JEL: F14 F15 L50 L94 Q52 Q56
    Date: 2013–12
  7. By: Sahbi Farhani; Muhammad Shahbaz; Ilhan Ozturk
    Abstract: The present study explores the relationship between coal consumption, industrial production and CO2 emissions in case of China and India for the period of 1971-2011. The structural break unit root test and cointegrating approach have been applied. The direction of causal relationship between the variables is investigated by applying the VECM Granger causality test. Our results validate the presence of cointegration among the series in both countries. We also find the existence of inverted U-shaped curve between industrial production and CO2 emissions for India but for China it is U-shaped relationship. Coal consumption adds in CO2 emission. The causality analysis reveals that industrial production and coal consumption Granger cause CO2 emission in India. In case of China, the feedback effect exists between coal consumption and CO2 emissions. Due to the importance of coal in China and India, any reduction in coal consumption will negatively affect their economic growth as well as electricity supply.
    Keywords: Coal consumption, Industrial production, CO2 emissions
    Date: 2014–04–22
  8. By: Florian Fizaine; Victor Court
    Abstract: More and more attention is being paid to renewable technologies because there are seen as a great opportunity to disengage our society from its dependence on fossil fuels. Such flowbased energy resources that rely on solar energy, are supposed to lead us toward a sustainable energy future. However, because of their high capital intensity, renewable technologies require large amounts of matter, among which common and rare metals. These metals require energy for their production, and more specifically for their extraction. The energy cost associated to metal extraction is linked to mineral ore grade, meaning that as depletion progresses, energy cost increases. On the other hand, renewable energy resources deliver less net energy to society compare to fossil fuels, because of their diffuse nature. It is therefore easy to see that a close relationship exists between energy and metals sectors. In this article, we tried to more precisely describe this relationship by investigating how the energy requirement associated to metal extraction could impact the energy-returnoninvestment (EROI) of different renewable technologies. We found that if only copper is considered, because it is the only metal with sufficient data for a deep analysis, the EROI of renewable technologies is not really affected. However, if other metals are considered in an extreme scenario in which they are all extracted from common rocks, the EROI of renewable technologies could be gravely altered.
    Date: 2014
  9. By: Asian Development Bank (ADB); (Office of the General Counsel, ADB); ;
    Abstract: Under the auspices of the Second Annual Asia-Pacific Dialogue on Clean Energy Governance, Policy, and Regulation, the Energy Efficiency Workshop was held on 20–21 June 2011 at the Asian Development Bank. The workshop—whose proceedings are documented in this publication prepared under the Law and Policy Reform Program of the Office of the General Counsel—focused on addressing the slow uptake of energy efficiency solutions by identifying the political, governance, and financial constraints in implementing energy efficiency solutions, and considering innovative policy, regulatory, and financial remedies for overcoming these constraints.
    Keywords: adb, asian development bank, asdb, asia, pacific, poverty asia, clean energy, clean energy forum, clean energy governance, energy security, energy development, climate change
    Date: 2011–06
  10. By: Finon, Dominique; Cepeda, Mauricio
    Abstract: This paper deals with the practical problems related to long-term security of supply in electricity markets in the presence of large-scale wind power development. The success of renewable promotion schemes adds a new dimension to ensuring long-term security of supply. It necessitates designing second-best policies to prevent large-scale wind power development from distorting long-run equilibrium prices and investments in conventional generation and in particular in peaking units. We rely upon a long-term simulation model which simulates electricity market players’ investment decisions in a market regime and incorporates large-scale wind power development either in the presence of either subsidised wind production or in market-driven development. We test the use of capacity mechanisms to compensate for the long-term effects of large-scale wind power development on the system reliability. The first finding is that capacity mechanisms can help to reduce the social cost of large scale wind power development in terms of decrease of loss of load probability. The second finding is that, in a market-based wind power deployment without subsidy, wind generators are penalized for insufficient contribution to the long term system’s reliability.
    Keywords: Electricity markets; generation adequacy; wind power; capacity mechanism;
    JEL: Q56 Q42 L94
    Date: 2013–04
  11. By: Ina Meyer; Mark Wolfgang Sommer
    Abstract: The paper investigates a central hypothesis of the green economy concept, which states that transitioning to a low-carbon economy is justified on a sound economic basis. We analyze this hypothesis by focussing on employment effects from renewable energy deployment, based on an evaluation of 23 selected impact studies from peer-reviewed journals. The studies are categorized into two clusters, one consisting of studies that represent employment factors of specific renewable technologies, and another that compiles model-based scenario assessments on employment effects from specific renewable policies. Both clusters distinguish the applied methodologies and the type of employment effects considered – direct, indirect, induced, gross or net. Given the heterogeneity of assumptions, the results of the different studies are hardly comparable, although we find that a majority of the investigated scenarios show positive net employment effects. These results crucially depend on the financing of an RES support scheme and the global competitiveness (technological lead) for a specific technology. The positive link between renewable energy deployment and job creation is thus not straightforward, since different assumptions, system boundaries and modelled interactions such as the crowding out of alternative energy production or effects from prices, income and foreign trade influence the results. Further research is needed.
    Keywords: Renewable energy, employment effects, green economy, climate mitigation
    JEL: J20 Q01 Q20 Q52
    Date: 2014–04
  12. By: Sahbi Farhani; Muhammad Shahbaz; Mohammad Mafizur Rahman
    Abstract: The present study investigates the relationship between natural gas consumption and economic growth using Cobb-Douglas production function by incorporating exports, capital and labor as additional factors of production. We apply the ARDL bounds testing approach to test the existence of long run relationship between the series. The VECM Granger approach is implemented to detect the direction of causal relation between the variables. Our results show that variables are cointegrated for long run relationship. The results also indicate that natural gas consumption, exports, capital and labor are contributing factors to domestic production and hence economic growth in case of France. The causality analysis indicates that feedback hypothesis is validated between gas consumption and economic growth which implies that adoption of energy conservation policies should be discouraged. The bidirectional causality is also found between exports and economic growth, gas consumption and exports, capital and energy consumption, exports and capital. This study opens up new direction for policy makers to formulate a comprehensive energy policy to sustain economic growth for long span of time in case of France.
    Keywords: Gas Consumption; Economic Growth; Exports; Capital; Labor; France.
    Date: 2014–04–22
  13. By: Mandell, Svante (Department of Real Estate and Construction Management, Royal Institute of Technology); Nilsson, Jan-Eric (The Swedish National Road and Transport Research Institute (VTI)); Vierth, Inge (The Swedish National Road and Transport Research Institute (VTI))
    Abstract: The impact of policy instruments supposed to reduce greenhouse gas emissions from road freight transports may seem smaller than expected. Using insights from economics and contract theory, the paper sorts out the (possible) instances of market failure in the freight transport market; operator market power, asymmetric information split incentives, and public goods. The primary limitations of standard policy instruments are demonstrated to be linked to unobservable information. Some of these may be reduced but not eliminated as information technologies develop, making it possible to observe, verify and provide contract-relevant information to the uninformed parties. There is little reason to believe that possible market failures present major limitations to the efficiency of economic instruments geared toward protecting the climate, other than possibly in the short run.
    Keywords: Freight transport; climate; greenhouse gas; policy instruments; asymmetric information; split incentives
    JEL: Q53 R40 R48
    Date: 2014–04–10
  14. By: Finon, Dominique
    Abstract: In the present European Union debate, many consider capacity remuneration mechanisms (CRM) as useless and, if they are eventually considered as useful, there is a necessity of total alignment of capacity adequacy policies in time. We develop an opposite position. The adoption of CRM is a necessity because the market and regulatory failures to invest in peaking units, which are amplified by the large, scale development of intermittent sources by out-of-market policies. Then, provided that some minimal harmonization is sought by regulators and TSOs, each member state should have some freedom in the adoption of his capacity adequacy policies.
    Keywords: energy market; capacity remuneration mechanisms (CRM); European Union;
    JEL: Q55 Q58 Q43
    Date: 2013–09
  15. By: John J. García; Francesc Trillas
    Abstract: The deregulation process in the EU electricity sector triggered strategic decisions that led to industry restructuring. This paper presents preliminary evidence of the impact of this process on investors, using event studies and estimation techniques such as least squares and GARCH. Our findings suggest three stylized facts: 1) regulatory reform in Europe was certainly accompanied by a takeover wave, as predicted by Mitchell and Mulherin (1996); 2) mergers and acquisitions had a positive impact on the stock price of target firms, and a much lower and sometimes even a negative impact for the bidding firms; 3) the effect of takeover announcements on the returns of competitors of the merging firms depends on the degree of market power. In countries with high market power (like Spain) competitors significantly increase share returns upon takeover announcements, whereas in countries with lower market power (like England and Wales) returns do not change significantly.
    Keywords: Deregulation; mergers and acquisitions; event study; energy
    JEL: L94 G14 G34 G38
    Date: 2013–11–12
  16. By: Erdogdu, Erkan
    Abstract: The world’s most expensive motor fuel (gasoline, diesel and LPG) is sold most likely in the Republic of Turkey. This paper investigates the key issues related to the motor fuel prices in Turkey. First of all, the paper analyses the main reason behind high prices, namely motor fuel taxes in Turkey. Then, it estimates the elasticity of motor fuel demand in Turkey using an econometric analysis. The findings indicate that motor fuel demand in Turkey is quite inelastic and, therefore, not responsive to price increases caused by an increase in either pre-tax prices or taxes. Therefore, fuel market in Turkey is open to opportunistic behaviour by firms (through excessive profits) and the government (through excessive taxes). Besides, the paper focuses on the impact of high motor fuel prices on road transport associated activities, including the pattern of passenger transportation, motorization rate, fuel use, total kilometers travelled and CO2 emissions from road transportation. The impact of motor fuel prices on income distribution in Turkey and Turkish public opinion about high motor fuel prices are also among the subjects investigated in the course of the study.
    Keywords: Model construction and estimation; fiscal policy; motor fuel prices
    JEL: C51 D72 E62 H23 Q43
    Date: 2013
  17. By: Bénédicte Meurisse; Maxime Le Roy
    Abstract: This paper investigates household behaviour with regard to vehicle fuel efficiency. We propose to approach the Willingness to Pay (WTP) for better fuel efficiency through the Hicksian compensating variation in income. Specifically, we distinguish the Willingness to Pay or to Accept (WTA) buying a more fuel-efficient car from the theoretical WTP for a reduction in fuel consumption without changing one’s car. Then by assuming that the household has to replace its car, we estimate a WTP for the cleanest car. We also analyse what effect a fuel tax and/or a feebate scheme (e.g. a bonus-malus scheme) have on the WTP for the cleanest car and on the driven mileage. We find that the WTP for the cleanest car decreases following the implementation of a fuel tax. To the contrary, a feebate system leads to an increase in this WTP. But we also find that reducing the market price of the new vehicle (i.e. through a bonus) is not worthwhile in the light of the rebound effect. However, a fuel tax – as soon as it exceeds a certain level – is able to nullify the rebound effect.
    Date: 2014
  18. By: Wensheng Kang; Ronald A. Ratti
    Abstract: This paper examines the interdependence of China's policy uncertainty, the global oil market, and stock market returns in China. A structural VAR model is estimated that shows a positive shock to economic policy uncertainty in China has a delayed negative effect on global oil production, real oil prices and real stock market returns. Shocks to oil market specific demand significantly raise China's economic policy uncertainty and reduce the real stock market returns. As measured by a spillover index the interdependence between these variables is rising since 2003 as China's influence in the oil market increases. An equivalent spillover index calculated for the U.S. is smaller and largely flat over time.
    Keywords: China's policy uncertainty, China's stock market return, Oil shocks, Structural VAR
    JEL: E44 G15 P40 Q43
    Date: 2014–04
  19. By: Wensheng Kang; Ronald A. Ratti; Kyung Hwan Yoon
    Abstract: This paper examines the effect of the demand and supply shocks driving the global crude oil market on aggregate U.S. bond index real returns. A positive oil market-specific demand shock is associated with significant decreases in aggregate bond index real returns for 8 months following the shock. A positive innovation in aggregate demand has a negative effect on real bond return that is statistically significant and becomes more adverse over 24 months. Structural shocks driving the global oil market jointly account for 27.1% of the variation in real bond returns at 24 month horizon. A spillover index from rolling SVAR models is used to identify the interdependence between the oil market and bond returns. The mean for this spillover index is 0.381 over 2001:01-2011:12 and 0.476 over September through December 2008 during the height of the global financial crisis.
    Keywords: Demand shocks, Oil prices, Bond returns, Supply shocks
    JEL: E44 G12 Q43
    Date: 2014–04
  20. By: Bouoiyour, Jamal; Selmi, Refk; Shahbaz, Muhammad
    Abstract: The core focus of this paper is to assess the relationship between the electricity consumption and institutions within rentierism phenomenon by incorporating economic growth, urbanization, trade openness and foreign direct investment in the case of Algeria. To this end, we have applied the ARDL bounds testing approach to cointegration and innovative accounting approach (variance decomposition and impulse response methods) over the period of 1971-2012. Our empirical results show that these variables are cointegrated in the long-run. We find that institutions play an important role to explain this cointegration. The response of electricity demand is increasingly negative due to the one standard deviation shock in institutions. This highlights an insightful evidence, providing that the poor governance drawbacks in a rentier state may affect directly electricity consumption or indirectly via urbanization and foreign direct investment. The contribution of economic growth to electricity consumption appears minor (the conservation hypothesis is limitedly supported), while that of trade openness seems insignificant.
    Keywords: Electricity consumption, institutions, rentier state.
    JEL: Q4 Q43
    Date: 2014–03–31
  21. By: Jouvet, Pierre-André; Gonand, Frédéric
    Abstract: The demographic structure of a country influences economic activity. The "second dividend" modifies growth. Accordingly, in general equilibrium, the second dividend and the demographic structure are interrelated. This paper aims at assessing empirically the "second dividend" in a dynamic, empirical and intertemporal setting that allows for measuring its impact on growth, its intergenerational redistributive effects, and its interaction with the demographic structure. The article uses a general equilibrium model with overlapping generations, an energy module and a public finance module. Policy scenarios compare the consequences of recycling a carbon tax through lowe r proportional income tax rather than higher public lumpsum expenditures. They are computed for two countries with different demographics (France and Germany). Results suggest that the magnitude of the "second dividend" is significantly related with the demographic structure. The more concentrated the demographic structure on cohorts with higher income and saving rate, the stronger the effect on capital supply of the second dividend. The second dividend weighs on the welfare of relatively aged working cohorts. It fosters the wellbeing of young working cohorts and of future generations. The more concentrated the demog raphic structure on aged working cohorts, the higher the intergenerational redistributive effects of the second dividend.
    Keywords: Energy transition; intergenerational redistribution; overlapping generations; double dividend; general equilibrium;
    JEL: D58 D63 E62 L7 Q28 Q43
    Date: 2014–04
  22. By: Heni BOUBAKER; Nadia SGHAIER
    Abstract: This paper investigates the dynamic properties of both return and volatility of the oil price. The analysis is carried out using a set of double long memory specifications incorporating several features such as long range dependence, asymmetry in conditional variances and time varying correlations. The in-sample diagnostic tests as well as the out-of-sample forecasting results show the performance of the ARFIMA-FIAPARCH model.
    Keywords: Oil price, return, volatility, dual long memory.
    Date: 2014–04–29
  23. By: CISCAR MARTINEZ Juan Carlos (European Commission – JRC - IPTS); FEYEN Luc (European Commission – JRC - JRC.H.7); SORIA RAMIREZ Antonio (European Commission – JRC - IPTS); LAVALLE Carlo (European Commission – JRC - JRC.H.8); PERRY Miles (European Commission – JRC - IPTS); RAES Frank (European Commission – JRC - JRC.H.7); NEMRY Francoise (European Commission – JRC - IPTS); DEMIREL Hande (European Commission – JRC - IPTS); RÓZSAI Máté (European Commission – JRC - IPTS); DOSIO Alessandro (European Commission – JRC - JRC.H.7); DONATELLI Marcello (European Commission – JRC - JRC.H.4); SRIVASTAVA Amit Kumar (European Commission – JRC - JRC.H.4); FUMAGALLI Davide (European Commission – JRC - JRC.H.4); NIEMEYER Stefan (European Commission – JRC - JRC.H.4); SHRESTHA Shailesh; CIAIAN Pavel (European Commission – JRC - IPTS); HIMICS Mihaly; VAN DOORSLAER Benjamin (European Commission – JRC - IPTS); BARRIOS Salvador (European Commission – JRC - IPTS); IBANEZ RIVAS Juan Nicolás (European Commission – JRC - IPTS); FORZIERI Giovanni (European Commission – JRC - JRC.H.7); ROJAS MUJICA Rodrigo Felipe (European Commission – JRC - JRC.H.7); BIANCHI Alessandra (European Commission – JRC - JRC.H.7); DOWLING Paul; CAMIA Andrea (European Commission – JRC - JRC.H.3); LIBERTA Giorgio (European Commission – JRC - JRC.H.3); SAN-MIGUEL-AYANZ Jesus (European Commission – JRC - JRC.H.3); DE RIGO Daniele (European Commission – JRC - JRC.H.3); CAUDULLO Giovanni (European Commission – JRC - JRC.H.3); BARREDO CANO Jose Ignacio (European Commission – JRC - JRC.H.3); PACI Daniele (European Commission – JRC - JRC.F.7); PYCROFT Jonathan (European Commission – JRC - IPTS); SAVEYN Bert (European Commission – JRC - IPTS); REVESZ Tamas; BARANZELLI Claudia (European Commission – JRC - JRC.F.8); VANDECASTEELE Ine (European Commission – JRC - JRC.F.8); BATISTA E SILVA Filipe (European Commission – JRC - JRC.F.8); IBARRETA RUIZ Dolores (European Commission – JRC - IPTS)
    Abstract: The purpose of the JRC PESETA II project is to gain insights on the sectoral and regional pattern of the impacts of climate change in Europe by the end of this century. The assessment concerns both the biophysical and economic impacts of climate change. The study has as new elements a large set of impact categories (a total of ten: agriculture, energy, river floods, droughts, forest fires, transport infrastructure, coasts, tourism, habitat suitability of forest tree species and human health) and climate model simulations (a maximum of fifteen for some impact sectors). Six of those impacts are integrated into an economic setup (agriculture, energy, river floods, forest fires, transport infrastructure and coasts). This report details the main methodological aspects of the integrative project and discusses the main results, both in biophysical impact and economic impact terms.
    Keywords: Environmental economics, greenhouse gas emissions reduction, green tax reform, energy tax, energy-intensive sectors, competitiveness, multi-sectoral, computable general equilibrium model (CGE), scenario-building techniques, climate change impacts and adaptation assessment
    Date: 2014–04
  24. By: López, Ramón E.; Yoon, Sang W.
    Abstract: This paper examines environmentally sustainable growth with reference to climate change assuming two final outputs and two factors of production, accounting for both pollution flow and stock effects. If the elasticity of marginal utility of consumption is greater than one, an optimal pollution tax ensures sustainable growth without any further government intervention. Otherwise, either a high temporal elasticity of substitution in production or consumption is required for sustainability. Even a suboptimal pollution tax may allow sustainable development provided the tax time profile meets certain conditions that are developed and described in this paper.
    Keywords: sustainable growth, consumption flexibility, technological change, optimal pollution tax, Community/Rural/Urban Development, Environmental Economics and Policy, O44, Q01, Q56,
    Date: 2014–04
  25. By: Turner, Robert (Department of Economics, Colgate University)
    Abstract: This is the draft of a chapter from a forthcoming book related to the conference Sensing Change: Mapping the Climatic Imaginary through Art, Science and History, held at the Chemical Heritage Foundation November 7-9, 2013. The artwork shown in the exhibit Sensing Change is part of a thriving environmental art movement. There is a long history of art influencing environmental attitudes and to some extent behavior. Historically such art has used what photography critic Vicki Goldberg calls the “pastoral eulogy†approach but there is also a more critical approach that emphasizes the environmental damage and risk associated with human behavior. Ecological artist Ruth Wallen says, “Ecological art work can help engender an intuitive appreciation of the environment, address core values, advocate political action, and broaden intellectual understanding.†But there is little evidence about whether people change their behavior in response to this sort of art. This chapter uses a contingent choice survey (a kind of choice experiment) to investigate whether exposure to such artwork influences environmental behavior, in particular the purchase of carbon offsets. (Purchasing offsets provides funding for activities that reduce net greenhouse gas emissions.) Contingent choice surveys are often used to analyze respondents’ environmental behavior and/or the underlying preferences for environmental goods and resources driving that behavior. In these surveys, respondents choose among a selection of hypothetical or real scenarios comprised of varying levels of different variables. Based on the choices they make, the relative importance of the different variables can be estimated. In the survey upon which this chapter is based, respondents chose from alternative carbon offset purchase options, including the option to buy no offsets. The central questions are as follows: what would make respondents more or less likely to choose to buy no offsets, and did respondents who saw artwork as part of the survey differ systematically from those who didn’t? Subsets of respondents in a choice experiment investigating willingness to buy carbon offsets were shown artistic images related to climate change. One subset was shown photographs from The Canary Project (Susannah Sayler and Edward Morris); another subset was shown images from the Wind Map: Poetry in Motion project (Fernanda Viégas and Martin Wattenberg); a control group was not shown any artistic images. The survey responses were analyzed to explore whether the artistic images affected respondents' willingness to buy carbon offsets. Another issue investigated was whether the images affect the ways in which the willingness to buy carbon offsets is influenced by other factors. These other factors include the types of mitigation efforts being funded by offsets and also personal characteristics of the respondents such as age, income, and adherence to social norms. The results of the split-sample contingent choice survey indicate that respondents who were shown photographs by the Canary Project that illustrate the impacts of climate change were more likely to purchase carbon offsets than were respondents in a control group. This is even though the respondents viewed the images only briefly: typically for less than a minute. Not all artistic images had this effect, though: respondents who saw animated images from the Wind Map Project that illustrate wind speeds and patterns for extreme weather events were actually less willing to buy offsets than the control group. Results indicate that preferences about buying carbon offsets are very heterogeneous, but in all cases the pattern remains that respondents in the treatment group that saw the Canary Project photos are more likely to buy offsets and respondents in the treatment group that saw the Wind Map Project images are less likely to buy offsets. The heterogeneity was driven largely by variables related to social norms and expectations. But the differences across treatment groups were not driven by differences in individual characteristics. The chapter continues with some thoughts about why the responses to the Canary Project and Wind Map Project art differed. The chapter concludes with some ideas for future survey-based research exploring the impact of art on environmental attitudes and behavior.
    Keywords: artistic images, carbon offsets, contingent choice, choice experiments
    JEL: Z11 Q54
    Date: 2014–04–01
  26. By: Shames, Seth; Bernier, Quinn; Masiga, Moses
    Keywords: Climate change, Agricultural development, agricultural carbon projects, action research, capacity building,
    Date: 2013
  27. By: Finon, Dominique
    Abstract: Tout le monde est familier des politiques de développement des énergies renouvelables promues hors marché soit par des tarifs de rachat, soit par des obligations de certificats verts, qui sont des réponses aux défaillances de marché en matière d’ investiss ements en technologies nouvelles. Parce que toutes les technologies bas carbone dont les ENR sont capitalistiques, nous assistons à une généralisation de tels dispositifs. Leur modus operandi est d’aligner les revenus par MWh sur les coûts de long terme de chacune et de reporter les coûts et les risques sur les consommateurs. Ces politiques hors marché commencent à avoir des effets sur le fonctionnement du marché électrique. On assiste au début du basculement vers un régime dominé par les coordinations pu bliques. Cet impact de ces politiques commence à peine à être discuté au niveau européen. Dans ce papier on montre la nécessité de ces arrangements de long terme pour atteindre les objectifs des politiques climatiques et leur effet sur l’effacement progre ssif de la fonction de coordination de long terme du marché. On conclut en plaidant en faveur d'une reconnaissance claire de ce rôle accru de la coordination publique et de la contradiction fondamentale entre ces politiques bas carbone et le régime de marc hé instauré par les directives européennes en Europe.
    Keywords: Décarbonation; système électrique; tarifs d’achat; technologies bas carbone; énergies renouvelables; coordination par le marché; coordination publique;
    JEL: Q55 L94 Q43 Q56
    Date: 2013–05
  28. By: Halkos, George; Tsilika, Kyriaki
    Abstract: One climate related phenomenon could affect many more. The direct costs associated to climate related factors pass to a number of other climate related costs through the indirect economic consequences of climate change. In this paper we propose a mathematical model which aims to provide forecasts of the distribution of the costs caused by the synergistic mechanism of environmental effects. The model is created to be directly applied to situations where the primary costs associated to climate related factors can be specified. It is expressed in matrix terms and is programmed using Mathematica’s matrix functions. We provide the framework for efficient computation of this model, covering possible linear and nonlinear functions of the impact mechanism for costs and, infinite direct cost scenarios. Some directions for the quantitative estimation of impact indicators and adaptation potentials of the costs incurred by certain climate related factors are included, in order to apply the proposed model using real socioeconomic data.
    Keywords: Computational techniques; Mathematica computer software; Climate change related factors; Cost interactions.
    JEL: C63 C88 Q50 Q54 Q58
    Date: 2014–04
  29. By: Jing Dai (University of Kassel); Andreas Ziegler (University of Kassel); Martin Kesternich (ZEW); Andreas Löschel (ZEW)
    Abstract: This paper examines the extent and the determinants of individual global climate change be-liefs. In contrast to former studies, it is focused on China due to its crucial role in global cli-mate policy and its responsibility as the worldwide biggest producer of CO2 emissions. The empirical analysis is based on unique data from a survey among more than 1000 individuals from five cities in China, namely Beijing, Guangzhou, Chengdu, Wuhan, and Shenyang. In line with previous studies in other countries, our results suggest that the vast majority of al-most 90% of the Chinese respondents believe in the existence of global climate change, which seems to be a convenient basis for ambitious climate policy in China. Our econometric analy-sis reveals that the personal experience with extreme weather events (and particularly heat-waves) alone is already sufficient to increase global climate change beliefs, although conse-quential personal physical or financial damages lead to stronger effects. A rising number of extreme weather events and consequential personal damages in the future might thus further decrease climate change skepticism. Our estimation results additionally reveal that females as well as people in medium ages, with higher household incomes, a lower education, and from Chengdu or Shenyang are more skeptical with respect to global climate change.
    Keywords: Global climate change, beliefs and skepticism, extreme weather events, China, micro-econometric analysis
    JEL: Q54 Q58
    Date: 2014
  30. By: Bourbonnais, Régis; Keppler, Jan Horst
    Abstract: Sur la demande de l’Union française d’électricité (UFE), Jan Horst Keppler, Professeur d’économie à l’Université Paris - Dauphine, et Régis Bourbonnais, Maître de conférences à l’Université Paris - Dauphine et spécialiste en économétrie, ont entrepris une série de tests statistiques pour déterminer l’élasticité prix de la demande électrique en France.
    Keywords: Services de l'électricité; Tarifs; Électricité; Consommation; Consommation d'énergie; France;
    JEL: E31 E21 L94 Q41 C13
    Date: 2013–10
  31. By: Robinson, Sherman; Strzepek, Kenneth M.; Cervigni, Raffaello
    Keywords: Climate change, Climate adaptation,
    Date: 2013
  32. By: Philippe Charlot (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Vêlayoudom Marimoutou (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - École des Hautes Études en Sciences Sociales (EHESS) - CNRS : UMR6579)
    Abstract: This study examines the volatility and correlation and their relationships among the euro/US dollar exchange rates, the S&P500 equity indices, and the prices of WTI crude oil and the precious metals (gold, silver, and platinum) over the period 2005 to 2012. Our model links the univariate volatilities with the correlations via a hidden stochastic decision tree. The ensuing Hidden Markov Decision Tree (HMDT) model is in fact an extension of the Hidden Markov Model (HMM) introduced by Jordan et al. (1997). The architecture of this model is the opposite that of the classical deterministic approach based on a binary decision tree and, it allows a probabilistic vision of the relationship between univariate volatility and correlation. Our results are categorized into three groups, namely (1) exchange rates and oil, (2) S&P500 indices, and (3) precious metals. A switching dynamics is seen to characterize the volatilities, while, in the case of the correlations, the series switch from one regime to another, this movement touching a peak during the period of the Subprime crisis in the US, and again during the days following the Tohoku earthquake in Japan. Our findings show that the relationships between volatility and correlation are dependent upon the nature of the series considered, sometimes corresponding to those found in econometric studies, according to which correlation increases in bear markets, at other times differing from them.
    Keywords: Multivariate GARCH; Dynamic correlations; Regime switching; Hidden Markov; Decision tree
    Date: 2014–04–17
  33. By: K. C. Ratha; S. K. Mahapatra
    Abstract: The powerful typhoon Haiyan that swept across the Philippines is one of the strongest storms ever to make landfall, cut a path of destruction through several central islands, causing scores of people dead. The disaster's full impact is still revealing as the entire country has been caught in a state of shock and desperation. The devastation is really horrific with human tragedy. Responding to the disaster of such magnitude calls for both national and international hands to come forward for the affected people.
    JEL: Q54 Q56 Q58 Q59
    Date: 2014–04
  34. By: Ariff, Syamimi; Hans-Dieter, Evers; Anthony Banyouko, Ngah; Farah, Purwaningrum
    Abstract: With the dwindling of natural resources, like oil and gas, even resource-rich countries like Brunei Darussalam and Malaysia have to re-adjust their development strategies. Governing knowledge for development (K4D) is seen as a way out of the dilemma of reduced revenues from natural resources. This paper analyses the attempts to create knowledge clusters as a strategy to move Brunei and Malaysia towards knowledge-based economies. Our study shows that several knowledge clusters have already been established in Peninsular Malaysia and are starting to emerge in Brunei Darussalam. The paper is structured as follows: the first section explains the dangers of falling into a “knowledge trap” and the strategies a country may adopt to govern knowledge. The second section looks at the epistemic landscapes in Peninsular Malaysia. Two knowledge clusters are the focal points of analysis, namely the North Corridor-Penang Knowledge Cluster and the Multimedia Super Corridor (MSC-Cyberjaya) Knowledge Cluster. We then provide empirical evidence of knowledge cluster formation in Brunei Darussalam as an effort to build up knowledge institutions and to diversify its economy. The paper ends with recommendations how to build the basis for a move towards a knowledge-based economy.
    Keywords: knowledge governance, knowledge cluster, development strategies, knowledge economy, Malaysia, Brunei Darussalam
    JEL: L2 L8 L86 L88 O2 O3 O53 R1 Z13 Z18
    Date: 2014–03–10
  35. By: López, Ramón E.; Yoon, Sang W.
    Abstract: This paper shows that the dynamic properties of the pollution-income relationship under an optimal pollution tax depends on three key factors, namely the degree of temporal and inter-temporal flexibility in consumption and the elasticity of substitution among production inputs. This paper derives general conditions for eluding the limits to growth showing that they require rather stringent assumptions which the existing literature has failed to identify.
    Keywords: Environmental Kuznets curve, Elasticity of marginal utility, Elasticity of substitution, Environmental Economics and Policy, O1, Q2,
    Date: 2014–02
  36. By: Nyongo, Lovemore
    Abstract: This study tests the long-run and short-run integration of maize markets in Malawi using the co-integration approach within the Vector Autoregressive modeling framework. The analysis is extended to Wald-F Granger Causality tests to see the direction of causality between maize markets. A total of six maize markets, two from each region, were analyzed. Three are urban markets, while two of the three rural markets are border markets. The study uses monthly maize retail prices for the period January 2000 to May 2008. Study findings show that nine out of the fifteen market pairs are integrated in the long-run, but the degree of short-run market integration is low, implying that the transmission of price information is slow.
    Keywords: maize, Prices, Markets, Market integration, co-integration, transaction costs, price transmission,
    Date: 2014
  37. By: Bhattacharyya, Chandril; Gupta, Manash Ranjan
    Abstract: In this paper, a model of endogenous economic growth is developed with special focus on the interaction between unionized labour market and environmental pollution. We introduce a trade union; and use both ‘Efficient Bargaining’ model and ‘Right to Manage’ model to solve the negotiation problem. Environmental pollution is the result of production; and the labour union bargains not only for wage and employment but also for the protection of environment. We derive properties of optimum income tax policy while financing abatement expenditure; and also analyse the effects of unionization on the level of employment and on growth rate. It appears that the optimum rate of income tax varies inversely with the relative bargaining power of the labour union. An increase in the relative bargaining power of the labour union may enhance employment in ‘Efficient Bargaining’ model if the labour union is highly employment oriented. However, the union always forces the firm to raise the spending rate for environment protection. So, unionisation may raise the growth rate, even if the first effect is negative, but the second effect dominates the first effect.
    Keywords: Labour union; Environment; Income tax; Abatement expenditure; Endogenous growth
    JEL: J51 O44 Q5 Q58
    Date: 2014–04–17
  38. By: Fisher, Anthony C; Le, Phu V
    Keywords: Social and Behavioral Sciences, climate change, nonlinearities, catastrophic events
    Date: 2014–03–01
  39. By: André Binette; Daniel de Munnik; Émilien Gouin-Bonenfant
    Abstract: Canada has continued to lose market share in the United States since the Great Recession, beyond what our bilateral competitiveness measures (relative unit labour costs) would suggest. In this context, we have studied 31 non?energy export categories to assess their individual performance against a category-specific foreign activity measure or benchmark, and to identify which export subaggregates will likely be supported by the recent depreciation of the Canadian dollar. Our main findings are: (i) among the 31 subsectors of non-energy exports, about half (in value terms) have either been performing as expected or outperforming their benchmarks; (ii) the remaining subsectors have lagged their benchmarks, mainly owing to longer-term structural declines; (iii) around half of the subsectors appear to be quite sensitive to persistent movements in the exchange rate; and (iv) about half of the non-energy export subaggregates are anticipated to lead the recovery, including those likely to benefit from robust growth in U.S. construction, U.S. investment in machinery and equipment, and/or the recent depreciation of the Canadian dollar.
    Keywords: Balance of payments and components, Exchange rates
    JEL: F10 F14 F43
    Date: 2014
  40. By: Thomas Goda; Alejandro Torres
    Abstract: In this study, we estimate the impact of the 2004-2012 energy and mining boom on the real effective exchange rate in Colombia and the sectoral composition of its economy. To this end, we introduce the new “extended Dutch Disease” concept, according to which a currency appreciation may not only occur due to traditional “spending” and “relocation” effects but also due to exports and massive inflows of external capital that finances the booming sector. The empirical results indicate that Colombia experienced an overvaluation of its real exchange rate, which in turn negatively affected the competitiveness of its manufacturing and agricultural sector.
    Keywords: Dutch Disease; real effective exchange rate; capital flows; de-industrialization; Latin America; Colombia
    JEL: F4 O13 O14 O54
    Date: 2013–11–12
  41. By: Ghosal, Vivek (Georgia Institute of Technology (Atlanta), European Business School Wiesbaden, and CESifo, Munich.); Stephan, Andreas (The Ratio Institute); Weiss, Jan (Jönköping International Business School)
    Abstract: Using a unique plant-level dataset we examine green productivity growth in Sweden’s heavily regulated pulp and paper industry, which has historically been a significant contributor to air and water pollution. Our exercise is interesting as Sweden has a unique regulatory structure where plants have to comply with national environmental regulatory standards and enforcement, along with decentralised plant-specific regulations. In our analysis, we use the sequential Malmquist-Luenberger productivity index which accounts for air and water pollutants as undesirable outputs. Some of our key findings are: (1) regulation has stimulated technical change related to pollution control, and has induced plants to catch up with the best-practice technology frontier with regard to effluent abatement; (2) large plants are more heavily regulated than small plants; (3) plants in environmentally less sensitive areas or those with local importance as employer face relatively lenient regulatory constraints; (4) environmental regulations trigger localized knowledge spillovers between nearby plants, boosting their green TFP growth.
    Keywords: TFP; DEA; Sequential Malmquist-Luenberger productivity index; pulp and paper industry; pollution; environmental regulations; enforcement; plant-specific regulation; productivity; Porter hypothesis.
    JEL: D24 L51 L60 Q52 Q53 Q58
    Date: 2014–04–24
  42. By: Grosche, Stephanie; Heckelei, Thomas
    Abstract: The addition of commodities to financial portfolios and resulting weight adjustments may create volatility linkages between commodity and financial markets, especially during financial crises. Also, biofuel mandates are suspected to integrate agricultural and energy markets. We calculate directional pairwise range-based volatility spillover indices (Diebold and Yilmaz, 2012) for corn, wheat, soybeans, crude oil, equity, real estate, treasury notes and U.S. dollar exchange rates between 06/1998 and 12/2013. During the recent financial crisis, volatility spillovers from equity and real estate to commodities rise to unprecedented levels. Yet, we find no indication of a parallel increase of volatility linkages between agricultural and crude oil markets.
    Keywords: Volatility spillovers, financialization, generalized forecast error variance decomposition, VAR, Agricultural and Food Policy, Agricultural Finance, Financial Economics, Research Methods/ Statistical Methods, Q13, C32, G11, G01,
    Date: 2014–04–17
  43. By: Grimm, Michael (University of Passau); Sparrow, Robert (Australian National University); Tasciotti, Luca (Erasmus University Rotterdam)
    Abstract: We analyse various pathways through which access to electricity affects fertility, using a pseudo-panel of Indonesian districts covering the period 1993-2010. Identification of causal effects relies on a district-fixed effects approach and controlling for local economic development. The electrification rate increased by about 65 percent over the study period and our results suggest that the subsequent effects on fertility account for about 18 to 24 percent of the overall decline in the fertility rate, depending on the specification. A key channel through which electrification affects fertility is increased exposure to TV, explaining about a quarter of the total fertility effect. Using in addition several waves of Demographic and Health Surveys, we find suggestive evidence that increased exposure to TV affects in particular fertility preferences and increases the effective use of contraception. Reduced child mortality seems to be another important pathway linking access to electricity and fertility. We find no evidence that changes to direct and indirect costs of children play a role. Overall, the results suggest that electrification contributes substantially to the fertility decline. In a context in which family planning policy still plays an important role this second order effect should be taken into account in cost benefit analyses of publicly funded grid expansion policies.
    Keywords: fertility, fertility transition, electrification, family planning, television, infrastructure, child mortality
    JEL: H43 H54 J13 J22 O18 Q40
    Date: 2014–04
  44. By: Nerhagen, Lena (VTI); Pyddoke , Roger (VTI); Jussila Hammes, Johanna (VTI)
    Abstract: Many countries have begun to require benefit-cost analysis as a way of informing key regulatory decisions. However, its actual use seem to be limited, especially in the area of environmental, health, and safety regulation. Reasons for this seem to be lack of knowledge and experience among decision makers and that established quality objectives prevent the use of this type of analysis and deliberation. We present the results from an experiment designed to investigate choice behavior in a public sector context. Students with different academic majors were asked to act as decision makers. There were two choice situations: one in a municipality deciding on an action plan and one in a government agency having to propose a national limit value. In both settings, the outcome that would pass a benefit-cost test would not achieve a natural state of the environment, hence a social dilemma choice situation. We find that a majority of the respondents prefer outcomes that can be considered environmental “optimum” but that there is a difference depending on academic major. The choice context also influences the response behavior and so does the information about an international standard. The latter increases the likelihood to accept alternatives that imply higher costs.
    Keywords: Benefit-cost analysis; Policy making; Environmental quality objectives; Discrete-choice analysis; Willingness-to-pay
    JEL: R40
    Date: 2014–04–29
  45. By: Andrea Szabo (University of Houston); Gergely Ujhelyi (University of Houston)
    Abstract: Nonpayment for public utilities is an important constraint to expanding service access in developing countries. As a potential policy response, this study implements and evaluates a randomized water education campaign in a low income peri-urban area in South Africa. We estimate substantial treatment effects: on the order of a 30% increase in payments over a three-month period. Surprisingly, these effects are not driven by an increase in households’ knowledge. We consider various possible explanations, and argue that the intervention likely had "nudging" effects on households. Our findings have important implications for understanding energy conservation and other public information campaigns.
    Keywords: nonpayment, information, water conservation
    JEL: Q25 Q28 H27 L95
    Date: 2014–04–21

This nep-ene issue is ©2014 by Roger Fouquet. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.